What are insurance deductibles?


Vehicle insurance policies vary from one state to another. Insurance policies in one state may or may not be available in other states. This is because each state has prepared a set different of insurance laws. However, no matter how different each state from one another, insurance policies still function the same way in every state.

Car insurance policies help policy holders to get back to their old way of living prior an auto related accident. Insurance companies however are not the only ones responsible in paying for the policy holder’s repair and medical bills after an accident occurs. The policy holder is also set to pay a certain amount of money that is written on the policy holder’s insurance policy. This amount of money that the policy holder is commanded to pay for is known as the insurance deductible or just called as the deductible.

The amount of deductible a policy holder is ordered to pay for depends on what he agreed when he purchased his insurance policy. Deductibles typically range from $150 to $1500, depending on what the state has required. In purchasing an auto insurance policy, choosing for a deductible is also an important step. Deductibles affect the rate of the insurance policy.

In choosing which deductible you would be willing to pay for, you must first consider your financial status. If you think you could pay for a higher deductible then you may choose to purchase a lower rate insurance policy. However, if you think you could not pay for a very high deductible then the best choice would be choosing a higher insurance rate and a lower deductible.

Another thing you need to consider is your car. If your car is old then a higher deductible and a lower insurance rate would help you save more money. But if you own a new car, you might want to choose a lower deductible and a higher rate insurance policy. For example, if you own an old family sedan, repairs and parts of this car cost less than when you own a steaming hot sports car.

Finally, you should also consider how often you get involve in an auto related accident. When you often get into an accident, it is more practical to purchase a higher insurance rate and pay for a lower deductible, but if you hardly get into any car related accident then getting a lower insurance rate and a paying for a higher deductible is better.